How Much Does An ERP System Cost?

ERP BUYING GUIDE SERIES (Article 3 OF 10)

Scroll to the bottom to see additional articles in this series. This interrelated series of blogs will focus on the important essentials to help you streamline the process of evaluating and procuring a new ERP system.

How Much Does An ERP System Cost?

Figuring out how much an ERP system costs (or perhaps fair market value) is a tricky question to answer. And the right answer for it is “it depends”, thus this article is intended to provide you some general guidelines as a basis for further research.

I’ll focus on costs for mid-market solutions in this article. Dynamics GP and Dynamics NAV are positioned by Microsoft as ideal for companies with $20Mil – $700 Mil in annual revenues. Both of these two ERP systems base the software licensing on concurrent users (# of users that can be in the system at the same time) instead of named users (actual # of people that will ever need to be in the system).

High Level Summary Costs of 3 Different On-Premise Scenarios (See Below For More Details):

(1) 3 CONCURRENT USERS – FINANCIAL MODULES ONLY
This scenario is about $20,000-$30,000 (software & implementation services. Hardware is extra).
Presumes that no customizations are needed. Presumes no integrations are needed.

Software: About $30,000 (includes initial software purchase and first year of annual maintenance). Roughly $6,000 for 3 users and roughly $3,600 for each additional user.

Implementation Service: About 220-320 hours (includes; requirements analysis, set-up, configuration, testing, training and go-live support services). As a reminder vendors typically charge $150-$195 per hour. Presumption that no customizations are needed. Presumption that no integrations are needed.

Hardware & Related: Roughly $25,000 – $40,000 if you don’t have any of the hardware & related items.

Software: About $48,000 (includes initial software purchase and first year of annual maintenance). Roughly $6,000 for 3 users and roughly $3,600 for each additional user.

Implementation Service: About 300-450 hours (includes; requirements analysis, set-up, configuration, testing, training and go-live support services). As a reminder vendors typically charge $150-$195 per hour. Presumption that few customizations are needed. Presumption that little to no integrations are needed.

Hardware & Related: Roughly $35,000 – $55,000 if you don’t have any of the hardware & related items.

Cost Components Of An ERP Project

1. Requirements Analysis Service

The detailed requirements analysis (RA) is typically the initial phase of the project.

Most vendors will provide ballpark pricing until a detailed RA has been completed.